Average mortgage amount up 10% to new record; Young buyers gaining ground

The average mortgage amount for purchasing a home in the Netherlands was 346,386 euros in the second quarter. That is an increase of 10 percent compared to a year earlier and a new record, the Hypotheker reported. The mortgage advisor noted that young buyers are gaining ground in the Dutch housing market. Half of the mortgage applications for buying a home in the second quarter were from people under the age of 35.

The total number of mortgage applications increased by 13 percent. The number of applications for buying a home rose by 14 percent (+16% in Q1) and amounted to 69 percent of all mortgage applications.

“Just like in the previous quarter, we saw a significant increase in the total number of mortgage applications. Due to increased incomes and stable mortgage interest rates, home buyers have more borrowing capacity,” said Mark de Rijke, commercial director of De Hypotheker.

Due to the housing shortage, home prices continue to rise - +13.6 percent in the second quarter, the NVM recently reported - and that is reflected in the average mortgage amount. “Last quarter, the average mortgage amount was at the highest level ever measured, 3 percent higher than the old record in Q1 of 2022,” De Rijke said.

“The share of young home buyers up to the age of 35 was particularly high,” the Hypotheker said about the second quarter. “No less than half of mortgage applications for the purchase of a home came from this age group.” The largest increase in the number of applications came from the 45 to 55 years age group (+17%), followed by the 35 and under group (+15 percent), and then the over 55s (+4 percent).

According to the Hypotheker, the growth in the number of mortgage applications among seniors is lagging behind other age groups due to the scarce supply of suitable housing for the elderly. “The number of seniors will only increase due to the aging population and it is, therefore, crucial that more elderly housing is built that meets their housing needs,” De Rijke said. Senior citizens being able to move into more suitable homes will also improve the flow in the housing market.

There were 14 percent more mortgage applications for renovating a home or taking sustainability measures in the second quarter compared to a year earlier. The number of homeowners who applied to refinance their homes decreased by 2 percent. “After a number of significant declines in 2023, the number of refinancings is now at a stable low level,” the Hypotheker said. The mortgage interest rate was high last year, so refinancing would have left homeowners with more interest to pay.